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China and the European Union (EU) have made a breakthrough in establishing a new bilateral high-level economic and trade mechanism which they aimed to launch in April.

Commerce Minister Chen Deming met EU Trade Commissioner Peter Mandelson in Beijing over the weekend, and exchanged views on how the mechanism should work.

China proposed the mechanism, which was agreed to at the China-EU Summit in Beijing in November 2007. The mechanism, to be overseen at the vice-premier level, is expected to deal both with short- and long-term issues of China-EU trade, investment and economic cooperation.

Chen's talks with Mandelson revolved around three key questions - what should be included on the agenda, how the mechanism will help arbitrate disputes and what the time span would be for the first results.

Chen and Mandelson have asked their respective officials to take the preparations forward in a businesslike and brisk manner to create a work program.

"We have laid the foundation for a constructive and strong personal relationship, and provided the basis to advance a positive EU-China trade agenda. The high-level mechanism is not a quick-fix - it will map out the long-term strategic direction of our economic and trade relationship, and help smoothen out issues we encounter along the way," Mandelson said after the meeting.

Last year, the China-EU trade volume reached $356.15 billion, up 27 percent over the previous year. China is now the second largest trade partner of the EU, and the EU is the largest for China.

Chen and Mandelson discussed a number of EU-China trade issues, as well as the current status of global trade talks.

Mandelson will meet with the chairmen of China Investment Corporation and China International Capital Corporation, Lou Jiwei and Zhu Yunlai, to discuss investment issues. He will hold his regular dialogue with European business representatives from the EU Chamber of Commerce in China, too.

In another development, the EU imposed five-year anti-dumping tariffs on ferro-silicon from China, Russia and three other countries to shield EU producers.

The duty on the ferroalloy, which was up to 33.9 percent, follows provisional ones introduced six months ago and will take effect after being published in the Official Journal.